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RESTRUCTURING $4.5bn DEBT

Al Jaber, top creditors agree debt terms: sources

Abu Dhabi, March 5, 2013

Abu Dhabi conglomerate Al Jaber Group has agreed on terms to restructure nearly $4.5 billion in debt with its main creditors, three sources said on Tuesday, with final approval from other lenders expected to end talks which have dragged on for over two years.

A family-owned group with operations in construction, aviation and retail, Al Jaber set up a five-bank creditor committee in 2011 to negotiate a restructuring after it became difficult for the firm to service its debt on maturity.

"The committee met the company last week and they've agreed to the terms of the restructuring with loan repayments spread over five years and without a haircut," one source familiar with the discussions told Reuters.

The term sheet is in circulation among the remaining approximately 30 lenders for final approval, the source added.

"It is not quite a done deal yet but it is an important step in the right direction," said a second source, declining to give additional details.

Al Jaber officials declined to comment.

Al Jaber is one of the most prominent private sector firms in Abu Dhabi, where the acknowledgment of financial difficulties has been minimal in contrast to neighbouring Dubai, which has been under the spotlight for its debt woes since late 2009.

Abu Dhabi, the cash-rich emirate which sits on most of UAE's oil wealth, began conducting a strategic review of its state-linked entities in 2011 as part of measures to ensure better investment discipline and governance in these firms.

DEBT PILE

Al Jaber's obligations of around $4.5 billion include funded and unfunded debt with the funded portion, made up of both conventional and Islamic facilities, being about $2.5 billion, sources said. The firm has not given a debt figure.

No details on the pricing was available but Bloomberg News reported that the restructured debt will pay annual interest of 300 to 400 basis points over the London Interbank Offered Rate, citing an unidentified source familiar with the matter.

The restructuring will enable Al Jaber to start reopening lines of credit and pitch for new contracts.

"The company's expansion plans can move forward with the debt restructuring nearly finalised," one banking source involved in the deal told Reuters.

Its banks' credit committee is chaired by National Bank of Abu Dhabi and includes Abu Dhabi Commercial Bank , HSBC Holdings, RBS and Union National Bank. Rothschild is advising Al Jaber. – Reuters




Tags: abu dhabi | banks | debt | Al Jaber | Restructure | Conglomerate |

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